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'Drastic changes' needed on some farms over profitability

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Cattle unloaded by farmer. Picture; Gerry Mooney

Cattle unloaded by farmer. Picture; Gerry Mooney

Bloomberg

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Cattle unloaded by farmer. Picture; Gerry Mooney

Farmers who are heavily reliant on subsidies need to make changes to improve farm profitability or consider drastic enterprise changes, a Teagasc advisor has warned.

Teagasc farm management specialist James McDonnell said tough conversations need to be had on some farms.

Citing data from Teagasc's National Farm Survey, he said current models of farming are eating into EU subsidies on thousands of beef and sheep farms.

"In 2018 the average subsidy payments made up 74pc of the family farm income of the average farm," he said.

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"Drilling deeper, the figures are more concerning for cattle and sheep farms, where the payments were up to 158pc of income.

"Every farmer should have a look (at these figures) and compare with their own business.

"If the figures are similar to your farm and repeat year on year, then I would suggest some tough conversations need to be had with your advisor to implement change."

Mr McDonnell suggested that farmers in this position should look at a review of their farm business model and discuss it with their farm advisor.

"Are there simple changes that can be made to improve farm profit, or should you be considering a more drastic enterprise change?

"Forestry, land leasing, organic farming, solar panels, partnering with a neighbour and contract rearing are just some of the options that other farmers have embraced.

"There's a lot of risk in farming now. If you change enterprise, there is a risk, but if you keep doing what you are doing there is also risk," he said.

Mr McDonnell also highlighted concerns over the next Common Agricultural Policy (CAP) which is being negotiated at present.

"We must rely on our politicians to get a good outcome for Ireland. It won't be easy due to budgetary pressures. That's a risk outside the farm gate, but with obvious implications for the business inside the farm gate," he said.

He stressed that it is essential that farmers review 2020 spending plans, even at this early stage in the year.

"Review your farm plan, farm finances, or plan a change. You may need a farm visit and if so make an appointment for a future date. It could be your most important business meeting of 2020," he said.

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